Mountainwest Ventures, LLC v. City of Hope, et al

Filing 34

MEMORANDUM DECISION AND ORDER. It is ordered that: Defendants' Motion to Dismiss 19 is GRANTED. Plaintiff's first claim for relief is DISSMISSED WITH PREJUDICE. Plaintiff's remaining state-law claims are DISMISSED WITHOUT PREJUDICE. Signed by Judge B. Lynn Winmill. (caused to be mailed to non Registered Participants at the addresses listed on the Notice of Electronic Filing (NEF) by (st)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF IDAHO

MOUNTAINWEST VENTURES,
LLC, a Colorado limited liability
company,
Plaintiff,
v.

Case No. 2:14-cv-000290-BLW
MEMORANDUM DECISION AND
ORDER

CITY OF HOPE, IDAHO, a municipal
corporation, JOE DEAN, BILL
BREEN, PHIL DREISBACH,
ROBERT LIZOTTE, BRUCE
STUTZKE, AND BRYAN QUAYLE,
Defendant.

INTRODUCTION
Pending before the Court is defendants’ Motion to Dismiss (Dkt. 19). For the
reasons explained below, the Court will grant the motion.
BACKGROUND
Plaintiff MountainWest Ventures, LLC, wishes to develop real property in the
City of Hope, Idaho. To develop the property according to its plans, MountainWest
applied to the City of Hope for a Conditional Use Permit. The City conducted public
hearings on the application on April 24, May 8, June 20, and July 10, 2013. Ultimately,

MEMORANDUM DECISION AND ORDER - 1

the City denied the application.
After the application was denied, MountainWest requested a regulatory takings
analysis from the City. Compl., Dkt. 1, ¶ 55. The City provided that analysis on August
29, 2013, and later denied MountainWest’s request for reconsideration. Id. ¶¶ 59, 64, 72.
MountainWest alleges that the City acted inappropriately at several points during
these proceedings. See Response Br., Dkt. 27, at 14-15; Compl., Dkt. 1, ¶¶ 17-58.
Among other things, MountainWest alleges that the City, or members of the City
Council:
(1)

did not provide timely or adequate information to MountainWest before or
after the public hearings, see Compl. ¶¶ 16-17, 27-29, 47-48, 56-59, 63, 70;

(2)

did not allow MountainWest to participate in the application review
meeting, id. ¶ 17;

(3)

met with, and provided information to officials from the Idaho
Transportation Department, without first notifying MountainWest, id.
¶¶ 20-24;

(4)

improperly remanded the application to MountainWest after the May 8,
2013 hearing, id. ¶¶ 31-33;

(5)

did not include in the record all of the information MountainWest had
provided, id. ¶¶ 37, 49-50;

(6)

did not timely decide the application, id. ¶¶ 40-41;

(7)

conducted an executive City Council session without identifying the basis
for doing so, id. ¶¶ 42, 60-61;

(8)

refused to provide MountainWest with a copy of the “preliminary decision
document” denying MountainWest’s application”, id. ¶¶ 52-53; and

(9)

“provided no forum for an appeal of . . . [the City’s] administrative land use
decisions to an independent hearing officer or impartial tribunal.” Id. ¶ 67.

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LEGAL STANDARD
1.

Legal Standard for Rule 12(b)(6) Motions
Federal Rule of Civil Procedure 8(a)(2) requires only “a short and plain statement

of the claim showing that the pleader is entitled to relief,” in order to “give the defendant
fair notice of what the . . . claim is and the grounds upon which it rests.” Bell Atlantic
Corp. v. Twombly, 550 U.S. 544, 555 (2007). While a complaint attacked by a Rule
12(b)(6) motion to dismiss “does not need detailed factual allegations,” it must set forth
“more than labels and conclusions, and a formulaic recitation of the elements of a cause
of action will not do.” Id. at 555. To survive a motion to dismiss, a complaint must
contain sufficient factual matter, accepted as true, to “state a claim to relief that is
plausible on its face.” Id. at 570. A claim has facial plausibility when the plaintiff pleads
factual content that allows the court to draw the reasonable inference that the defendant is
liable for the misconduct alleged. Id. at 556. The plausibility standard is not akin to a
“probability requirement,” but it asks for more than a sheer possibility that a defendant
has acted unlawfully. Id. Where a complaint pleads facts that are “merely consistent
with” a defendant's liability, it “stops short of the line between possibility and plausibility
of ‘entitlement to relief.’ ” Id. at 557.
The Supreme Court identified two “working principles” that underlie Twombly in
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). First, the court need not accept as true, legal
conclusions that are couched as factual allegations. Id. Rule 8 does not “unlock the
doors of discovery for a plaintiff armed with nothing more than conclusions.” Id. at 678-

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79. Second, to survive a motion to dismiss, a complaint must state a plausible claim for
relief. Id. at 679. “Determining whether a complaint states a plausible claim for relief
will . . . be a context-specific task that requires the reviewing court to draw on its judicial
experience and common sense.” Id.
Providing too much in the complaint may also be fatal to a plaintiff. Dismissal
may be appropriate when the plaintiff has included sufficient allegations disclosing some
absolute defense or bar to recovery. See Weisbuch v. County of L.A., 119 F.3d 778, 783,
n. 1 (9th Cir. 1997) (stating that “[i]f the pleadings establish facts compelling a decision
one way, that is as good as if depositions and other . . . evidence on summary judgment
establishes the identical facts”).
A dismissal without leave to amend is improper unless it is beyond doubt that the
complaint “could not be saved by any amendment.” Harris v. Amgen, Inc., 573 F.3d 728,
737 (9th Cir. 2009). The Ninth Circuit has held that “in dismissals for failure to state a
claim, a district court should grant leave to amend even if no request to amend the
pleading was made, unless it determines that the pleading could not possibly be cured by
the allegation of other facts.” Cook, Perkiss & Liehe, Inc. v. N. Cal. Coll. Serv., Inc., 911
F.2d 242, 247 (9th Cir. 1990). The issue is not whether plaintiff will prevail but whether
he “is entitled to offer evidence to support the claims.” Diaz v. Int’l Longshore and
Warehouse Union, 474 F.3d 1202, 1205 (9th Cir. 2007) (citations omitted).
Under Rule 12(b)(6), the Court may consider matters that are subject to judicial
notice. Mullis v. United States Bank, 828 F.2d 1385, 1388 (9th Cir. 1987). The Court
may take judicial notice “of the records of state agencies and other undisputed matters of
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public record” without transforming the motions to dismiss into motions for summary
judgment. Disabled Rights Action Comm. v. Las Vegas Events, Inc., 375 F.3d 861, 866,
n.1 (9th Cir. 2004). The Court may also examine documents referred to in the complaint,
although not attached thereto, without transforming the motion to dismiss into a motion
for summary judgment. See Knievel v. ESPN, 393 F.3d 1068, 1076 (9th Cir. 2005).
ANALYSIS
1.

The Due Process Claim
In its first claim for relief, MountainWest alleges that defendants violated its

procedural due process rights under the Fourteenth Amendment of the United States
Constitution. The threshold issue in such a claim is whether plaintiff has asserted a
protected property or liberty interest. See, e.g., Board of Regents v. Roth, 408 U.S. 564,
569 (1972). MountainWest asserts a protected property interest in the conditional use
permit it sought from the City.
The Ninth Circuit has explained that, “[i]n some instances, a person can have a
constitutionally protected property interest in a government benefit, such as a license or
permit.” Gerhart v. Lake Cnty., 637 F.3d 1013, 1019 (9th Cir. 2011). But a person
cannot simply unilaterally hope or expect to receive the permit. “He must instead have a
legitimate claim of entitlement to it.” Id. (quoting Roth, 408 U.S. at 577). To determine
whether MountainWest has a “legitimate claim of entitlement” to a conditional use
permit, the Court will look to Idaho law. See Outdoor Media Group, Inc. v. City of
Beaumont, 506 F.3d 895, 903 (9th Cir. 2007) (“[V]ested rights in a land development

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permit ‘are created and their dimensions are defined by existing rules or understandings
that stem from ... state law.’”) (quoting Roth, 408 U.S. at 577).
Idaho statutory law governing conditional or special use permits states that such
permits
may be granted to an applicant if the proposed use is conditionally
permitted by the terms of the ordinance, subject to conditions pursuant
to specific provisions of the ordinance, subject to the ability of political
subdivisions, including school districts, to provide services for the
proposed use, and when it is not in conflict with the plan.
Idaho Code § 67–6512(a) (emphasis added). Similarly, the applicable City of Hope
ordinance states that the City Council “may” grant a conditional use permit: “A
conditional use permit may be granted to an applicant if the proposed use is listed in the
Zoning Ordinance of the City of Hope, Idaho as a conditional use, and if it is not in
conflict with the comprehensive plan.” City of Hope Ordinance No. 208, § 4-6A1 1
(“emphasis added).
The use of the word “may” – rather than “shall” – in both the statute and the
ordinance indicates that the City Council retained discretion to grant or deny a permit.
See Marcia T. Turner, L.L.C. v. City of Twin Falls, 159 P.3d 840, 848-89 (Idaho 2007);
see also Burch v. Smathers, 990 F. Supp. 2d 1063, 1073 (D. Idaho 2014). As a result,
MountainWest cannot plausibly allege that it has a legitimate claim of entitlement to a
conditional use permit. See, e.g., Bateson v. Geisse, 857 F.2d 1300, 1305 (9th Cir. 1988)
(plaintiff did not have protectable property interest in plat application where City Council

1

This ordinance is attached as Exhibit 2 to plaintiff’s counsel’s declaration. See Boutz Aff., Ex. 2
thereto, at Dkt. 28-2, p. 9.
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had unbridled discretion in deciding how to handle the application); Hodge Capital Co. v.
City of Sausalito, 908 F.2d 976 (9th Cir. 1990) (unpublished table decision) (no
protected interest in conditional use permit application where the issuance of permit was
subject to the city’s discretion); Burch, 990 F. Supp. 2d at 1074 (same); Minnetonka
Moorings, Inc. v. City of Shorewood, 367 F. Supp. 2d 1251, 1257 (D. Minn. 2005)
(same); Oregon Entm’t Corp. v. City of Beaverton, No. CV-03-1432-JE, 2005 WL
839562, at *2 (D. Or. Apr. 11, 2005) (same). As a result, MountainWest’s procedural
due process claim is fatally defective. The Court will therefore dismiss MountainWest’s
first claim for relief, without considering the parties’ remaining arguments.
Normally, the Court would grant plaintiff the opportunity to amend its complaint.
But in this case, the Court cannot see how MountainWest could amend its complaint to
allege a protectable property interest. The Court will therefore dismiss this claim without
leave to amend.
2.

State Law Claims
Because the Court will dismiss plaintiff’s federal due process claim, the only

remaining claims are based on Idaho state law. “A district court’s exercise of pendent
jurisdiction over state law claims arising from the same set of operative facts that
supports a federal claim is a matter of discretion.” Les Shockley Racing, Inc. v. Nat'l Hot
Rod Assn., 884 F.2d 504, 509 (9th Cir. 1989). “When, as here, the court dismisses the
federal claim leaving only state claims for resolution, the court should decline jurisdiction
over the state claims and dismiss them without prejudice.” Id.; see also 28 U.S.C.
§ 1367(c)(3). Having considered the values “of judicial economy, convenience, fairness,
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and comity” the Court will decline to exercise supplemental jurisdiction over
MountainWest’s remaining claims. Carnegie-Mellon Univ. v. Cohill, 484 U.S. 343, 350
(1988). The Court will dismiss these claims without prejudice to plaintiff refiling them in
state court.
ORDER
It is ordered that:
(1) Defendants’ Motion to Dismiss (Dkt. 19) is GRANTED.
(2) Plaintiff’s first claim for relief is DISSMISSED WITH PREJUDICE.
(3) Plaintiff’s remaining state-law claims are DISMISSED WITHOUT
PREJUDICE.
DATED: January 14, 2015

_________________________
B. Lynn Winmill
Chief Judge
United States District Court

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